Originally posted by Manager433:
North Korea’s nuclear test and UN sanctions have brought relations between the U.S. and North Korea to their lowest point since President Bush took office. Yet it was only little more than a year ago that for one brief moment hopes were kindled for a diplomatic settlement of the nuclear dispute. At the six-party talks on September 19, 2005, a statement of principles on nuclear disarmament was signed between the U.S. and the Democratic People’s Republic of Korea (DPRK – the formal name for North Korea). The Bush Administration, however, viewed its signature on the agreement as only a tactical delay. During negotiations it had firmly rejected the statement, and was brought around only when the Chinese delegation warned that it would announce that the U.S. was to blame were the six-party talks to collapse.
The ink was barely dry on the document when the U.S. immediately violated one of its main points. Although the U.S. was required under the agreement to begin normalizing relations with North Korea, on literally the very next day it announced the imposition of sanctions on North Korean accounts held in the Macao-based Banco Delta Asia, ostensibly because they were being used to circulate counterfeit currency.
Whether there was any substance to the accusation or not has yet to be shown, but there are at least some grounds for skepticism. German counterfeit expert Klaus Bender believes that since U.S. currency is printed on specially made paper in Massachusetts, using ink based on a secret chemical formula, “it is unimaginable” that anyone other than Americans “could come by these materials.” The printing machines that North Korea obtained three decades ago, Bender says, are “outdated and not able to produce the USD supernote, a high tech product.” He strongly implied that the CIA could be the source of the counterfeit currency as it “runs a secret printing facility equipped with the sophisticated technology which is required for the production of the notes.” That the CIA has the capacity to print money does not prove that it has done so. It would, however, have a motive, and the source has not been traced. Wherever the counterfeit supernotes came from, the Bush Administration was ardently using the issue as a pretext to take action against North Korea. Despite that, Bender reports, “the opinion of experts” is that the U.S. allegation against North Korea “is not tenable.” (1)
Banco Delta Asia was quick to deny the charge, saying that its business relations with North Korea were entirely legitimate and commercial. Over a year later, the U.S. has yet to complete its investigation. As long as the investigation remains unresolved, the U.S. can continue to freeze the DPRK’s funds. Russian Ambassador to South Korea Gleb Ivashentsov called for the U.S. to present evidence to back its accusation. Yet all the Russians received was “rumor-level talk.” U.S. Treasury officials met with a North Korean delegation in New York in March 2006, but provided nothing to back the charge. DPRK delegation head Ri Gun remarked afterwards, “There were neither comments nor discussion” about evidence. At that meeting, he proposed creating a joint U.S.-DPRK consultative body to “exchange information on financial crimes and prepare countermeasures.” The North Koreans said they would respond to evidence of counterfeiting by arresting those who were involved and seizing their equipment. “Both sides can have a dialogue at the consultative body through which they can build trust. It would have a very positive impact on addressing the nuclear issue on the Korean peninsula,” Ri said. The delegation also suggested that a North Korean settlement account be opened at a U.S. financial institution and placed under U.S. supervision, so as to allay suspicions. (2)
Not surprisingly, the North Korean offers were rejected. By raising the issue of alleged counterfeiting, the Bush Administration sought to use this as a means to justify economic warfare against the DPRK. It was not an agreement with North Korea that the Bush Administration wanted, but regime change, and further action was soon to come. The U.S. went on to impose sanctions on several North Korean import-export firms, on the unsubstantiated charge that they were involved in the arms trade. Then more sanctions were announced, this time against several Indian and Russian firms doing business with the DPRK, along with yet more North Korean companies. (3)
The measures taken against Banco Delta Asia deprived North Korea of a major access point to foreign exchange, and served also as a mechanism for magnifying the effect of sanctions. By blacklisting Banco Delta Asia, the U.S. caused other financial institutions to curtail dealings with the bank, until it was forced to sever relations with North Korea. The campaign soon took on global significance. The U.S. Treasury Department sent warning letters to banks around the world, resulting in a worldwide wave of banks shutting down North Korean accounts. Fearing U.S. retaliation, banks felt it prudent to close North Korean accounts rather than risk being blacklisted and driven out of business. U.S. Treasury Under Secretary Stuart Levey observed that sanctions and U.S. threats had put “huge pressure” on the DPRK, leading to a “snowballing…avalanche effect.” U.S. actions were meant to undermine any prospect of a peaceful settlement. From now on, a senior Bush Administration official revealed, the strategy would be: “Squeeze them, but keep the negotiations going.” But talks, the official continued, would serve as nothing more than a means for accepting North Korea’s capitulation. A second U.S. official described the goal of talks as a “surrender mechanism.” Indeed, even before the signing of the September 19 agreement, the U.S. had already decided “to move toward more confrontational measures,” claims a former Bush Administration official. (4)
As general manager of Daedong Credit Bank, a majority foreign-owned joint venture bank operating in Pyongyang and primarily serving importers, Nigel Cowie was in a position to witness the effect of the Treasury Department’s letters. “We have heard from foreign customers conducting legitimate business here, who have been told by their bankers overseas to stop receiving remittances from the DPRK, otherwise their accounts will be closed.” To illustrate the lengths to which U.S. officials were prepared to go, Cowie described an operation that involved his own firm, from which, he said, “you can draw your own conclusions.” An account was opened with a Mongolian bank. Arrangements were made for legal cash transactions. But when the Daedong Credit Bank’s couriers arrived in Mongolia, they were detained by Mongolian intelligence officials, and their money confiscated. Accusations were made that the couriers were transporting counterfeit currency from North Korea. A leak to the news media from an unidentified source led to reports charging that “North Korean diplomats” had been arrested for smuggling counterfeit currency. After two weeks, the Mongolian “intelligence officials in a meeting with us finally conceded that all the notes were genuine; the cash was released.” In the final meeting, Mongolian intelligence officials “appeared rather embarrassed that they had been given incorrect information.” It requires little imagination to guess the source of that incorrect information. (5)